Instructor: Kevin Robertson. Systems the span Organizational Boundaries Lecture Outline 7-2

Transcription

1 Instructor: Kevin Robertson Systems the span Organizational Boundaries Lecture Outline 7-2

2 Decision Support Systems

3 Systems That Span Organizational Boundaries

4 Decision Support Systems* Computerized information systems designed to help business owners, executives, and managers resolve complicated business problems and/or questions Structured vs. Unstructured decisions Structured Decisions Decisions that are taken based upon specific pre-set parameters that support the decision. To make the decision, it is known what data is required, and there is an assumptions that the required data will always be available. Little flexibility for decision-maker Unstructured Decisions Decisions made when all elements of business environment are not completely understood. (new products, marketing strategy). Data might be incomplete at the moment of making the decision More focus on the individual who makes the decision.

5 Decision Support Systems Decision Support Systems Special-purpose information systems designed to support managerial-level employees in organizational decision making System Details These systems use computational software to construct models for analysis (most common is MS Excel) to solve problems (e.g. sales or resource forecasts) Supported Activities*: What-if analysis changing one or more variables in the model to observe the effect (e.g. What is the payment if the interest rate increases by 1%?)

6 Characteristics of Decision Support Systems*

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8 Decision Support Systems A DSS may be developed by people outside of the Information Systems Department A DSS also can have capability for ad hoc reporting from the data base (warehouse) Examples of decision support: should we buy out a company? should we expand into another product line? [why semi-structured?]

9 Decision Support Systems* Typically include: a database a model base that uses the data base Structured representation of some aspect of reality Through modeling we can examine effects of decisions A model always includes assumptions e.g., inflation rate, net earnings level over 5 years; cost increases A user-friendly interface (dialog), often involving graphics

10 Decision Support Systems

11 Components of a Decision Support System* User Interface or Dialogue Manager: Allows decision makers to easily access and manipulate the DSS and to use common business terms and phrases Allows users to interact with the DSS to obtain information Assists with all aspects of communications between user and hardware and software that constitute the DSS Allows for manipulation of variables

12 Components of a Decision Support System* Database Management System: Allows managers and decision makers to perform qualitative analysis on data stored in company s databases, data warehouses, and data marts Can also be used to connect to external databases Data-driven DSS: Performs qualitative analysis based on the company s databases

13 Components of a Decision Support System* Model base: Allows managers and decision makers to perform quantitative analysis on both internal and external data Model-driven DSS: Performs mathematical or quantitative analysis Model Management Software (MMS): Coordinates the use of models in a DSS

14 The Model Base (Examples)

15 The Model Base (Examples)

16 Model Driven DSS vs. Data Driven DSS A Model Driven DSS uses various models such as statistical model, simulation model or financial model for decision makings and to come up with a decision or strategy. Decisions are based on models. A Data Driven DSS emphasizes access to and manipulation of a timeseries of internal company data and sometimes external data to aid decision makings. So, decisions are based on analyzed data.

17 Model Driven DSS vs. Data Driven DSS

18 DSS Concepts * A more primitive example of a DSS is a spreadsheet used for what-if analysis There are Excel templates built for certain types of decisions [terms: template, model; explain these] Template: Frame to define in general terms an aspect of reality. Instances of this aspect are created by filling in information on the template Model: A representation of a process in real life ( can be graphical or numerical). Contains variables that can be modified.

19 Model-Driven Ex. Loan Calculator

20 A Comparison of DSS and MIS * DSS differs from an MIS in numerous ways, including: The type of problems solved The support given to users The decision emphasis and approach The type, speed, output, and development of the system used See comparison of DSS with MIS

21 A Comparison of DSS and MIS *

22 Web-based DSS Examples for End Customers Evaluate alternative investment in mortgage portfolios Fidelity.com (on-line investor center) Evaluate and compare air fares Travelocity.ca Expedia.ca Evaluate and compare various automobile prices Edmunds.com

23 More DSS Examples Canadian gov t: PRAIRIE CROP PROTECTION PLANNER Farmer describes: spraying equipment, size of field, current chemical prices Model calculates: application rates, costs per acre, amount of chemical needed US: helps farmers decide in which regions of Nebraska to plant grapevines to avoid freezing

24 More DSS Examples Airline industry: DSS helps to find proper pricing to maximize overall revenue from selling seats for each flight Manager enters departure airport, arrival airport, # of stops, times of departure and arrival, # days in advance for reservation, # persons, size of plane, utilized capacity on similar previous flights etc. System suggests variable ticket prices

25 The Airline Industry Yield management systems are designed to maximize the amount of revenue that an airline generates on each flight. Yield management systems are the reason that an airfare you re quoted over the phone can be $100 higher when you call back an hour later.

26 The Airline Industry

27 The Airline Industry HC-Simulation Software to Optimize Healthcare Processes - Flexsim Heathcare Urgent Care Tutorial Video 1 Video 2 Video 3

28 Decision Support Systems End of Lecture 7-2